Crypto Influencer Sentenced to 45 Months for $2M Fraud

Crypto influencer Thomas John Sfraga, known by his alias T.J. Stone, has been sentenced to 45 months in federal prison for wire fraud. The sentencing, which took place in Brooklyn, was presided over by U.S. District Judge Frederic Block. Sfraga was found guilty of defrauding real estate and cryptocurrency investors out of over $2 million. In addition to his prison sentence, Sfraga was ordered to forfeit $1,337,700, with restitution to be determined at a later date.

The case, which was led by the U.S. Attorney’s Office for the Eastern District of New York and the FBI’s New York Field Office, revealed a long-running fraudulent scheme. Sfraga exploited personal relationships and investor trust to fund a series of sham businesses. He ran fraudulent businesses, including Build Strong Homes LLC and Vandelay Contracting Corp., a name referencing the fictional “Vandelay Industries” from Seinfeld. Under the alias “T.J. Stone,” he portrayed himself as a real estate developer, media personality, and cryptocurrency expert, even acting as an emcee at major crypto events in New York.

Between 2016 and 2022, Sfraga convinced at least 17 victims to invest in fraudulent ventures, including real estate flipping projects and cryptocurrency investments. He promised returns of up to 60% in just three months. One of his schemes involved persuading a victim to lend him $100,000 for a construction project that did not exist. In another, he promoted a fictitious crypto “virtual wallet,” enticing victims with the prospect of high returns. Rather than investing the funds, Sfraga spent the money on personal expenses and used some to repay earlier victims in a Ponzi-style scheme.

As authorities began investigating, Sfraga fled to Arizona and assumed a false identity. Law enforcement arrested him in Las Vegas after he failed to pay a bill at the Wynn Casino. The case was prosecuted by Assistant U.S. Attorney John Vagelatos, with support from Paralegal Specialist Madison Bates, culminating in Sfraga’s sentencing.

U.S. Attorney John J. Durham condemned Sfraga’s actions, stating that he “stole from friends, neighbors, and even parents of children who played on sports teams with his own kids.” This case serves as a stark reminder of the risks associated with investing without independent verification and the potential for fraud within the cryptocurrency and real estate sectors. The sentencing of T.J. Stone highlights the importance of due diligence and the need for regulatory oversight to protect investors from such schemes.